Kodak has been on a downward spiral with profits falling greatly in the face of the digital photo revolution that has all but killed the film camera. Kodak is in such a bad place that it had three members of its board of directors jump ship in one week. Reuters is reporting that Kodak is now rumored to be preparing to file Chapter 11 bankruptcy in a bid to save the company.

The photography firm is said to be in talks with lenders to bring in debtor-in possession financing to the tune of $1 billion. The Chapter 11 filing could come as quickly as February. Kodak had previously said that it could raise a lot of cash by selling off some of its patent trove.

The patents Kodak holds have been estimated to be worth as much as five times the market cap of the company. That gives the company the option of selling some patents to stay afloat if the financing it is seeking doesn't come through. Kodak has warned previously that it will need to raise at least $500 million in funding to stay afloat in 2012.

If the report is accurate and Kodak files Chapter 11, it could then sell off the patents it holds as part of the court supervised auction. Kodak also warned this week that its stock might be removed from the New York Stock Exchange if the share price doesn't grow in the next six months.

The full financial details for Kodak's fiscal Q4 will be reported on January 26. An official announcement that it will file Chapter 11 could come during the financial disclosure.